Eleventh Circuit Holds District Court Had No Jurisdiction to Enjoin Fee Dispute Between Attorneys Under State Law

BNA’s United States Law Week reported in Vol. 75, No. 22 (Dec. 12, 2006) on the case Burr & Forman v. Blair, --- F.3d ----, 2006 WL 3391427 (11th Cir. Nov. 27, 2006). Here is an excerpt from the case:

The Anti-Injunction Act serves as a check on the broad authority recognized by the All Writs Act. It prohibits federal courts from utilizing that authority to stay proceedings in state court unless the requirements of one of three narrow exceptions are met. Under the Anti-Injunction Act, an injunction halting a state court proceeding is inappropriate, "except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. § 2283. The All Writs Act and the Anti-Injunction Act are closely related, and where an injunction is justified under one of the exception's to the latter a court is generally empowered to grant the injunction under the former. See Olin Corp. v. Ins. Co. of North America, 807 F.Supp. 1143, 1152 (S.D.N.Y.1992). Thus, in assessing the propriety of an injunction entered to stop a state court proceeding, the sole relevant inquiry is whether the injunction qualifies for one of the exceptions to the Anti-Injunction Act.

. . .

We now turn to the applicability of the "protect and effectuate its judgments" exception, the so-called "relitigation exception." This exception is essentially a res judicata concept. For an injunction to be proper under this exception, each of the claim preclusion requirements of the applicable state law--here, Alabama law--must be met. In Alabama, for res judicata to be applied there must be (1) a prior judgment on the merits; (2) rendered by a court of competent jurisdiction; (3) substantial identity of the parties; and (4) the same cause of action in both law suits. Wesch v. Folsom, 6 F.3d 1465, 1471 (11th Cir.1993).

The district court twice remanded the state court action pursuant to 28 U.S.C. § 1407(c), first on July 6, 2004 and then on July 22, 2005. In both remand orders, the court noted that it lacked subject matter jurisdiction due to a lack of citizenship diversity between the parties. An order remanding a case for lack of subject matter jurisdiction is not reviewable. 28 U.S.C. § 1447(d) ("An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise[.]"). Section 1447(d) bars not only appellate review of a a remand order, but also reconsideration of the order by the remanding district court. Harris v. Blue Cross/Blue Shield of Alabama, Inc., 951 F.2d 325, 330 (11th Cir.1992).

Much as in our Harris decision, the district court, "having relinquished jurisdiction, could not reassert it [.]" Id. at 330. Once the court remanded the case for the first time, any jurisdiction it may have had over the case ceased. The court, therefore, lacked subject matter jurisdiction to issue the Merits Order disposing of Blair and Trussell's claim. Because the court lacked subject matter jurisdiction to issue it, the order was not entered by a court of competent jurisdiction. Thus, the Injunction does not fall within the Anti-Injunction Act's relitigation exception.

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